Euro, stocks rise on Chinese growth
The euro hit a six-week high and shares rose today as signs of quicker Chinese growth boosted investors' risk appetite although gains were capped by US budget worries.
Activity in China's vast manufacturing sector sped up for the first time in 13 months in November, according to the latest Purchasing Managers' Surveys (PMI), adding to evidence the economy is reviving after seven quarters of slowing growth.
"We are in an environment where the big picture risks are still there; the US fiscal cliff, the euro zone and China - on two of those (China and the euro zone) arguably things have been improving," Philip Poole, global head of macro investment strategy at HSBC Global Asset Management, said.
Uncertainty over whether Washington can avert the "fiscal cliff", $600 billion worth of tax increases and spending cuts that will be automatically triggered in early 2013 unless Democrats and Republicans agree how to cut the deficit, was also keeping investors nervous.
MSCI world equity index edged up about 0.1 per cent 332.80 helped by a small gain in MSCI's broadest index of Asia-Pacific shares outside Japan.
In Europe the FTSE Eurofirst 300 index of top European shares rose 0.2 per cent in early trade to 1,121.87 points with London's FTSE 100, Paris's CAC-40 and Frankfurt's DAX all around 0.2 per cent higher.
The euro hit a six-week high against the dollar at $1.3048 on the upbeat Chinese data, before settling to be around $1.3030 ahead of the a euro zone finance ministers meeting which is due to assess the latest plan to help Greece.
The Greek government has unveiled details of a €10 billion bond buy-back crucial to cutting its ballooning debt pile, hoping the terms will draw enough investors and unblock aid.
The dollar was down 0.1 per cent against the yen at 82.27, but not far from a 7-1/2-month high of 82.84 yen touched on November 22.
Oil prices were underpinned by the firm Chinese data, tensions in the Middle East.
US crude futures rose 0.15 per cent to $89.04 a barrel and Brent added 0.3 per cent to $111.55, while London copper gained 0.2 per cent to $8,010 a tonne.
That uncertainty underpinned gold's appeal as a safe-haven as spot gold edged up 0.25 per cent to $1,719 an ounce.